Praying For Obamacare to Fail

“Make it work.”

This advice on health reform to Democrats earlier this month illustrates that President Clinton knows what the opponents of Obamacare also know: success is the best political revenge.

As the health reform law moves off the drawing board into the real world, its opponents are doing their best to make it not work — by shifting their energies from fulminations about the boogeymen they imagine in the law to hampering, complicating or outright obstructing its implementation.

For openers, half the states have announced they will probably not expand their Medicaid programs under the law — though there have been defectors, most notably Florida. This will leave a large segment of the uninsured priced out of even the subsidized insurance markets created under Obamacare, while adding enormous complexity and uncertainty for small businesses and multi-state employers who want to comply with the law and cover their lower-income workers.

The same states, more or less, are also refusing to establish health insurance exchanges — online marketplaces where small businesses and individuals can purchase private health insurance — the fulcrum of the law’s provision for those not covered by Medicaid. As of last Friday’s deadline, 24 states and the District of Columbia were going ahead with exchanges and 26 were not.

While the refusenik states generally cleave to the red state/blue state divide, two Democratic governors went the other way, while three Republican governors have chosen to implement the law and build exchanges — each for interestingly divergent political reasons. Things were messiest in Kansas and Mississippi, where Republican governors went to war with their own insurance commissioners over the matter and ultimately prevailed. In New Jersey, Governor Chris Christie simply vetoed the exchange bill passed by his own legislature.

Stand-offs between a state’s insurance commissioner and governor are especially illustrative of how critical exchanges are to the implementation of Obamacare. The job of an IC is to regulate a chronically dysfunctional insurance marketplace, impose transparency on an industry that thrives on obfuscation, and deal with the everyday disasters of people who cannot access insurance or were shafted on insurance they thought they had. The job of a governor is to direct the political compulsions of a state, ideally through vision and leadership, but too often through grandstanding, in its ugliest form in defiance to the federal government.

While governors just saying no fans the flames of partisanship and makes it more difficult for health reform to succeed on the ground, the substance of the objections about the exchanges — by Republican pols, Wall Street Journal editorial writers, and conservative bloggers alike — have nothing to do with reality. Exchanges are bureaucratic contraptions of immeasurable complexity and cost, they argue, and will not work. But if the exchanges were bridges too far, the vetoed insurance commissioners would not put their own political capital at risk to build them.

As with other ideological about-faces among the president’s critics since market principles emerged along the foundations of his health reform plan, the reality of the exchanges is exactly the opposite of what their critics would have us believe. The health insurance exchanges in Obamacare utilize marketplace ideas and processes to emulate the emerging best practices of today’s employer-based, private health insurance marketplace, expanding and making them available to all.

The exchanges will combine the establishment of a health benefits package, a process for certifying local and national insurers to sell that package, and an online marketplace for small businesses and individuals to pick and choose the best insurer to buy it. For the working poor, they will also credit a sliding scale subsidy toward their purchase. The exchanges represent the Expedia, Hotels.com and Cars.com for health insurance — designed to shed the opacity of three other traditionally inefficiently priced industries — and increase choice, transparency, mobility and competition among insurers for consumers’ dollars.

Those who, like insurance commissioners, actually know what they are talking about when they talk about insurance exchanges, do so for good reason. There are three already operating today, by payroll processing giant ADP and employee benefits management companies AON and Towers Watson. But as with most things in health insurance, the private exchanges are limited to people with health benefits from their employers. Most small businesses, the self-employed, and those who buy their own coverage — the bulk of those of who will benefit most from health reform — are left out, the same way the tax code has always discriminated against their health insurance purchasing and the market has tried to priced them out as expensive nuisances.

The private exchanges represent an incremental but important evolution from what large employers have been doing for decades: allowing employees to pick and choose from a variety of health plans through what many call “benefits portals.” Such portals are complicated, with far more moving parts — dental, vision, child care, extra vacation time — than anything available as part of Obamacare. And yet they work, are updated every fall for “open enrollment,” and provide a good working model for what is possible for the rest of us with the implementation of health reform.

There is much to pick on in the details of the president’s reform plan, and many of its elements will execute less than perfectly in the first few years of its implementation. (Unlike today’s health insurance system, which we all know executes flawlessly.) But governors who, on misinformed ideological principle, are deliberately complicating this implementation — implicitly rooting for and attempting to enable its failure in their own states — are falling into an odd political trap. They may be perfectly willing to abandon their uninsured, underinsured, and working poor as “takers” whose votes do not matter.

But because Obamacare is a federal law, they are merely delegating their undesirables back to the federal government, which is building its own fail-safe exchange. Under the law, when a state cedes their people to the Federal exchange it also cedes away any right to decide which health plans are allowed onto that exchange — effectively giving up any say-so over which insurers will be serving their own citizens. This would be sufficient explanation for why an insurance commissioner would want one enough to defy his or her own governor.

Giving up all that control to the Fed, because your ideology vilifies the Fed as an overreaching control freak, may seem like a Pyrrhic way to make your point. But not to anyone trying to sort anti-Obamacare rhetoric from legislated reality. Nowhere more than here is it obvious that the ideological war over the president’s plan has little to do with health policy and everything to do with politics. The single biggest problem with “Obamacare” is that it now goes by the name its critics foisted on it in derision. It was inevitable that the partisanship inspired by the law’s passage would only intensify with its implementation.

Demagoguery over the exchanges may be particularly loud because, as mentioned earlier, it represents another ideological about-face, an example of the recurring paradox about the main ideas behind Obamacare. Conservatives have been in a frenzy of denial that the central mechanism of the law — the individual insurance mandate — was their idea all along, a fact well documented in public policy literature before I summarized it in a New York Times essay in September. The depth of the fury I inspired across the conservative blogosphere showed the rawness of nerves on this point — especially given my pro-market, pro-business credentials. (It gets lonely in Washington when you believe in capitalism and competition, but have zero interest in the Obama-hating, social conservative goat rodeo currently dismantling the Republican Party.)

The same political paradox applies to the exchanges. As a market-enabling mechanism for ending the dysfunctionality of local health insurance purchasing, the idea emerged not under President Obama, but under President George W. Bush. Exchanges were first championed by his Secretary of Health and Human Services, Michael Leavitt, the former governor of Utah. Not coincidentally, Utah is one of three states with a Republican governor that is building its own exchange or, more precisely and tellingly, adapting the one it built years ago.

Politicians ignore such paradoxes at their own peril. As Mitt Romney learned while attempting to distance himself from his signature accomplishment as governor of Massachusetts, Obamacare’s naysayers are playing a dangerous political game. The Supreme Court has upheld almost the entire law, some of which has already been implemented with narry a whirr from the black helicopters. Nearly three years after its passage, there have been no actual reported health coverage or job losses of any significance — only a steady stream of media reports saying that business lobbies and benefits consultants are all saying that their members and clients are all saying they are thinking about cutting coverage and jobs.

All that remains for those rooting for the failure of Obamacare, now that the Supreme Court has ruled against them, are a handful of nuisance lawsuits, more obstructionism, and the inevitable conflation about every element of implementation that did not work to perfection into an indictment of the entire plan.

Socialized medicine! Government bureaucrats dictating what your doctor can do! No more freedom to choose your own doctor!

Yes, that is what they all said — about Medicare, when it was enacted in 1965. Back then, there was a Greek chorus lamenting how Medicare would drive all physicians from practice and spell the end of medical innovation. I would cite specific members of that chorus — a few of whom were ideological state-level politicians who went on to support Medicare when they rose to national prominence — but the vast majority were policy experts and writers, and almost no readers will recognize their names.

Like those today working to obstruct or complicate the implementation of Obamacare – along with those simply rooting from the sidelines for its failure — they were simply wrong.

Success is the best political revenge.

J.D. Kleinke is a pioneering health care information entrepreneur, medical economist, author, policy expert, and business strategist.

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  1. If some individual states are refusing to take part in running health exchanges, then the task will surely devolve to the federal government – producing an enormous workload, certainly, but one that’s perhaps nearer the idea of the single national health exchange that the House Democrats were originally seeking.

  2. This is a great debate, and the perfect embodiment of the sausage grind that gave us the PPACA, and would give us the next attempt.

    Obamacare sits almost squarely on the midline of the American political continuum because it represents a nearly perfect political hybrid of two opposing and irreconciable political viewpoints. The politics of health reform is the dumping ground for all of America’s ideological and philosophical conflicts (e.g. fairness and equity or efficiency and innovation?) along with all of its culture wars (e.g. birth control and abortion).

    And so we got what we got: Obamacare. Liberals hate it because it is not single-payer, and feeds tens of millions of newly insured people to what they revile as a money-gobbling, profit-obsessed health insurance dragon. Conservatives hate it because it is the heavy hand of government choking whatever air is left out of the current, dysfunctional health insurance market – and because they cannot see beyond their political rage at President Obama to recognize their own ideas at the core of his health reform plan.

    You guys can daydream about a single-payer utopia or laissez faire Lord of the Flies free market all you want, but neither will ever happen in our lifetimes. (Along with any meaningful tax reform or gun control.) Democracy used to be a messy discussion and, thanks to reasons ranging from the rise of cable news to Twitter to our now chronic economic anxiety, democracy is nothing more two sides hating each other as loudly as possible, for the cameras.

    Root for the PPACA to fail all you want, but if it does, we’re back to where we’ve been since the failure of HillaryCare: a pathetic trajectory of high costs, ever shrinking coverage, and tens of thousands dying every year because they are priced and kicked out of a broken health care system.

    I’d rather try and believe and be wrong, than give in to despair. This isn’t the Super Bowl – we are talking about people’s lives.

    • Mr. K – it is precisely BECAUSE we are talking about people’s lives that I am so critical of “Obamacare” – I was a healthcare professional for over 20 years and was, to put it midly, very much involved with those lives.

      I am not “rooting for it to fail” – it WILL fail because it was never designed to succeed as a way of providing “affordable healthcare” to all, or even most – if that was truly the purpose, it would not have been designed in the way that it was …

      This “middle of the road approach” speaks only to the odds of getting something “passed” in the current political environment – but has little or nothing to do with whether what is passed is even reasonably likely to produce anything that can achieve its stated purpose – the mismatch between mechanism and stated intent couldn’t be more obvious, IMO …

      Given that, why spend (waste) all that time and those resources in an effort to pass and implement something that was BS from the get go –
      patience is a virtue but it never helped a rooster lay an egg = with regard to the eggs we need to nourish reform this PPACA is a rooster indeed ….

      As far as getting single payer and the other things you mention – given the makeup of our officeholders – D/Rs who travel the political gamut from A to B, you are correct – but we can change that – we can use the voting booth to elect people who will pass such reforms, or who, at the very least will use their bully pulpits to highlight, press and vote for these reforms – something the party we might have expected to do that (Dems) hasn’t done for decades … (Remember Baucus Sen committee hearings where he had single payer folk, MDs, arrested for doing nothing more than demanding a voice for SP? And his famous remark “What we need are more police”? – their attitude in a nutshell). There ARE real alternative choices out there to both the corporate parties, and it is way past time to make them ,,,,

      As far as being “back to where we were”, from the public’s perspective, with the possible exception of a very few “poster people”, we haven’t left where we were …

      This plan is a pig in a poke – it has been from the start and every compromise made, starting with the exclusion of bargaining with Phrma and of a public option, was made so that it would pass, and give the Dems a “victory”, not to improve it – and every one of those compromises either made it worse or more toothless – If you are as cynical as you appear to be about politics, with every justification, I might add, you know the truth of this …

      Likewise it seems to me if you really want to address the issue – instead of insisting that we will “never” get the only solution, single payer (or some variant), that has a chance of actually getting us to “affordable” care with “everybody in, nobody out”, you will use your own bully pulpit and connections to fight for it – or you can continue to be “realistic” about a situation that should not be tolerated …

      If you are going to “try and believe” – at least pick something worth believing in … The source of my own despair lies in folks’ apparent refusal to use the ballot box to get what we really need instead of a “lesser evil” or the best that the MSM tells us we can get …

      We are indeed talking about people’s lives and it is time we got serious – this Super Bowl mentality of the D team v the R team as the only game in town is precisely what has gotten us into this sorry state …. A pox on both their houses …

      It always amazes me how easy it is to get otherwise intelligent folk to accept BS as acceptable by convincing them it is the only “realistic” thing to do, or the “best” we can get – all that guarantees is that we will get more BS – as we have for way too long …

      • @Aquifer, get over yourself.

        I can’t speak for anyone else, but I’ basically a Fabian Socialist and was as enthusiastic as you or anyone else about single-payer or just about anything better than what we got with PPACA. I watched those hearings gritting my teeth as one by one the most important parts were eviscerated. Kleinke said it right when he called it “sausage.”

        That said, what we have now is not a “plan.” It’s law. And as much as I hate to say it, it’s better than what was there before. The insurance industry is not going away. After banking and the defense industry, it may be the next most powerful force in this or any country.

        Excuse my bluntness, but you’re not the only one who has been fighting the same dragons so get with the program. Stop bitching about what we ain’t got and start trying to figure out how to make the best of what we have. I can tell from your remarks that whoever you are, you are too smart to let yourself get away with such negativity.

        • Mr. B –

          Precisely what “program”, am I supposed to get with? The one that got us this boondoggle? The same one that ensures that “systemically dangerous” institutions such as big banks will continue to be TBTF by bailing them out, then turns around and says we can’t afford, and so must whack, Medicare? The same one that seems to be taking the same approach to insurance companies by guaranteeing them “customers” and subsidizing their income to boot when these same companies have done more to thwart than to facilitate healthcare – THAT Program?

          Perhaps you have been fighting “dragons”, but which ones? If they are the same as mine, sounds to me at this point, with regard to health care, as though you have thrown in the towel, as in settling for “how to make the best of what we have” …

          However, coming from a different direction, that is precisely what i am trying to do in trying to get the best out of our electoral system – trying to use it to get considerably better than what we have ..

          Negativity? – Hmmm, actually seems to me I am the one with the most positive outlook here, in the sense that i think we can do considerably better than this – whereas most apparently feel that as bad as it is, this is the best we can do …

          I got over myself a long time ago – now i am simply beside myself that we have set the bar so low that instead of reaching for it we will have to take care not to trip over it (an image i ran across in another venue) …

    • J.D. Kleinke

      Thank you so much or saying this:

      ” I’d rather try and believe and e wrong than give into despair. This isn’t the Super Bowl– we are talking about people’s lives.”


  3. Reread your statement and reread mine. Admit I was not very clear. So some clarification here: For those on either end of the political spectrum who ascribe carefully coordinated conspiracy theories to the primary authors of PPACA – either claiming that Obamacare is designed to fail as a prelude to single payer or those who claim that this is designed to benefit the current big players (insurers, providers) – you are giving people in the US Congress way too much credit for being able to pull together a group that can produce a carefully constructed piece of legislation with a clear view of its ultimate success or failure. The law that was passed was primarily the version crafted in the Senate and it was rushed to a vote following the death of Sen. Kennedy – that was not planned and the authors actually wanted more time to craft the law that was enacted – so it doesn’t really seem that the law really ever completely crafted. I doubt that anyone – whether fan or foe – predicted the Supreme Court’s majority decision coming out as it did.
    My criticism of PPACA is not political, it is operational.
    The law seems to include too many components and requires the most massive computer integration project ever.

    The authors made two questionable assumptions – that all states would willingly subscribe for Medicaid expansion and also that nearly all states would sponsor primarily state run public exchanges. Hence my analogy that the law runs the risk of being like the F 35.
    My contention to the advocates of Obamacare is that the exchanges, especially in California, run the risk of being rolled out by next October with inadequate development of the computer interfaces, a largely untested group of staff and volunteers as navigators and assisters of hundreds of thousands of individuals who have never enrolled in a benefits plan, and much higher apparent price tags than the target audience has ever felt they needed to pay. If my fears are correct, there will be a public backlash from those who have been and still are supportive of Obamacare that will be nearly impossible to overcome.
    The reason I don’t relish that outcome is that in the meantime literally millions remain uninsured, the costs continue to spiral upward, and while the current critics may celebrate that outcome – for our society as a whole this would be a bad result – even if single payer is later successfully created.
    So I am not “praying for failure” – but speaking from considerable experience administering benefits in both the corporate and Taft Hartley worlds – Obamacare simply has too many ‘moving parts” that need to be working in harmony. Perhaps a better analogy is that I fear that Obamacare’s implementation may be an experience similar to what Boeing is still having with the Dreamliner – and not happy to feel that way.

    And to my friends who simply argue let’s just dump it and go to single payer, my only retort is that if Obamacare does fail to reach a successful implementation, it will be even harder to sell single payer, not easier.

    • PP – Not sure who you are replying to ….

      But it is no secret who basically wrote the legislation – Baucus pointed her out (with gratitude)- Liz Fowler, who came out of one of the big insurance co, don’t remember which, and proceeded to go back there somewhere …And it is no secret that Obama used the so called “public option” as a bargaining chip, puny as it was, to be discarded and that he had made deals with Big Phrma, et.al ….

      I am a bit confused- you seem to agree that this is an unworkable mess, but don’t want it to fail – though it would seem that, if it WAS actually intended to advance health coverage, it is rather clear that it won’t. Given that, why not toss it so we can get on with getting something that will work …
      As far as its failure making it harder to sell single payer, i am inclined to disagree – it was sold as a “market based solution” to provide “affordable care” to most (not all) – so when it collapses, ISTM that folks may (hopefully) finally become terminally disillusioned with such a model and pick up single payer as the obvious alternative. Polls have repeatedly shown that it is already a model favored by many …. interrupted in its trajectory by this barrier put in its way ….

  4. While a single payer system is the ideal, it is probably not an option since we have gone so far down the fee for service path. Obama Care strives to optimize our hybrid system. It will be fraught with problems all of which will be addressed and patched a little.

    Lets seek to understand the fundamental question: Is health care a right or a privilege? The crux of the problem. Until we decide where on that continuum our philosophy resides…all other approaches are just addressing symptoms not the root cause.

    • “While a single payer system is the ideal, it is probably not an option since we have gone so far down the fee for service path.”

      Roy, Canada has FFS. It is negotiated with docs every so often. Docs also can withdraw service – to a point, just like any other union. I’m not saying it’s the ideal, but FFS is not a barrier to single-pay.

      FFS keeps them working, salary will have to have some method to keep them seeing x number of patients per day.

      • I hear your point.

        We are upside down and have known it for a long time. Change will be very difficult…and your patient’s per day issue brings back many memories as a hospital administrator trying to get “owned primary care docs” to understand the economic reality of creating a margin!!!

    • Well methinks, although it should be declared a right on simple moral humanitarian grounds, we don’t really need to go there to argue single payer – the economic arguments are clear enough to support it ….

  5. Obamacare is a huge bailout for the same health care insurance industry that’s long been acting as a blood-sucking parasite on America’s health care system. It’s also been acting as a Keynesian welfare program for overpaid, underworked hospital executives and lazy armchair doctors and nurses who wouldn’t know how to diagnose and treat patients if their life depended on it! There’s some good carrots in Obamacare, but overall, in the long run, it’ll prove to be poisonous.

    Medicare-for-All was the way to go, but Obama bargained all that away behind closed doors long before the American public had any say.

    What did you expect? This is the same guy that bailed out Wall Street, the guys that crashed the world economy, and gave them trillions of dollars all in the name of “protecting” the little guy. Anyone who can’t see through his lying eyes can’t possible see, much less understand, that Obamacare has been deliberately designed to be a pork-fest for Wall Street and higher-ups employed in the medical-industrial complex.

  6. OK – got the point, you are a fan of Obamacare – but it is not going to be worth a hoot for reasons that have nothing to do with political recalcitrance in implementation at the state level, which, if you stop to think of it was a pretty dumb place for a Fed. program to leave it, doncha think?

    There are no cost controls – and as insurance co raise their rates, the premiums, co-pays and deductibles will increase out of pocket costs – and does anyone think that a gov’t that is so hung up on “debt” will allocate anywhere near a sufficient amount of “subsidy” to provide decent policies?

    If you want to really cover folks and control costs – scrap this monumental boondoggle and go straight to (improved) Medicare for All – the bill HR676 has recently been re-introduced – get your Sen/Con. to sign on and let’s get this show on the road …

    • “OK – got the point, you are a fan of Obamacare”

      Yes and no. I support a mandate but not one that forces people into the most expensive system in the world. Health care in the U.S. is still too fractured, lacks transparency and divides patients into privileged and non privileged groups. The “off the income cliff” subsidies will hurt people trying to increase their income and leave many people out who should otherwise get a subsidy (unaffordable family coverage on employer plan).

      I also don’t trust the exchanges (just insurance companies) to offer affordable coverage as the insurance industry makes it’s money on risk assessment, and depending on the risk group mix and size in the exchanges will determine if healthy people will get any break.

      “If you want to really cover folks and control costs – scrap this monumental boondoggle and go straight to (improved) Medicare for All”

      I’d support that. We should be one big group with the same access and coverage. Maybe some century we’ll get there.

      • Peter – my post was directed at the author of the piece, which i suppose i should have made clear (this set up is a bit hard to sort out, methinks…)

        In any case, given all your very legitimate objections, i am not quite sure what your “yes” applies to – except “mandates” – of what sort? STM that Medicare for All – “everybody in, nobody out” – is all the mandate we in the healthcare system, at least, should need ..

        As for how soon we could get it – that IS strictly up to us. There are folks routinely on the ballot for whom this is an integral part of their platform – this does NOT include D/Rs – for Stein (Jill Stein, MD, Green party candidate in ’12) this was an integral part of her platform. If we want single payer we will have to vote for it – in fact it is the only way we will get it …

        • “i am not quite sure what your “yes” applies to – except “mandates” – of what sort?”

          Aquifer, I like no pre-exist, no maximum, as most people do, even ones opposed to Obamacare – the usual something for nothing crowd.

          If health care were the single voting issue I doubt people would vote Medicare – Single Pay. As long as employer subsidized tax free coverage is the dominate “devil you know” single pay through Medicare will have to be gradual. I just hope I don’t go broke first paying for a system twice as expensive as other world systems.

          • Employer healthcare coverage is getting sparser and sparser and poorer and poorer – with more and more of the cost in premium, deductible and co-pay being shifted to the employee. And, ironically, under Obamacare, more and more employers may be tempted to just “pay the fine” and wash their hands of the whole mess. When more and more folks are apprised of the fact that single payer – even with a higher payroll tax, would take less out of their pocket to pay for health care than they are faced with now, methinks the tide will turn more and more …

          • @Aquifer
            Employer healthcare coverage is getting sparser and sparser and poorer and poorer etc.

            Exactly. And that will ultimately be part of the solution. The main reason America’s per patient medical expenses are the highest in the world is not because we have the best system (outcomes are middling to poor by most metrics, especially infant mortality, life expectancy and a raft of chronic conditions) but because patients and their families have very little “skin in the game.
            Because employer subsidies are a business expense, employee premiums are tax-advantaged, Medicare and Medicaid are tax dollars being redistributed and insurance premiums are jacked up by corporate profits, executive compensation packages, non-medical overhead expenses, and horrendously expensive advertising production and air time expenses.

            What we are looking at is not health care but a bubble. The bubble is being pumped by an avalanche of tax-advantaged revenue streams, laundered by ersatz “not-for-profit” hospital and insurance operations serving as money-laundering operations for endless FOR-profit ancillary businesses.

            The footprint of most health care systems in America is often as big as an industrial park. There are so many clinics, labs, private practices, specialty centers, agencies, imaging centers, retail outlets selling durable equipment and disposables, pharmacies, the list is endless. And that doesn’t take in to account the ancillary non-medical businesses from window-cleaning, landscaping and waste removal to uniform sales, food service outlets and parking garages. It takes your breath away to think of it. And every dollar supporting this growing monster is in one way or another part of the cost of health care in America.

            When auto makers spend more for health care than for steel, or Starbucks spends more for health care than for coffee, something is seriously out of balance. (Those extremes may no longer be true, but they were just a few years ago.)

            For reference check out this totally conservative alternative vision from the George Bush era, not from some Socialist front group but the American Enterprise Institute whose Conservative credentials are impeccable.

            If that doesn’t give you something to think about nothing will.

          • Mr, Ballard – disagree, methinks the reason that expenses are so high is that the providers, not the payers, are holding the reins – charging what the market will bear, and folks need healthcare, so they will pay through the nose, to the point of bankruptcy, to get it …

            Ironically with multiple insurers, none has enough clout to deal with providers – which is where the prices are set – with a single insurer or single payer, providers will have to take what they can get …. That’s one part – the second part is the profit margin of private insurers which add NOTHING to health care …. Taken together, when multiple payers can be eliminated – costs can be controlled considerably.

            Skin in the game is one thing, getting skinned by the game is something else – folks have considerable skin in the game already – they are holding off on getting care, ironically, because they can’t afford to lose any more skin …..

  7. 1) Delusional! You use some form of the term insurance 27 times in this “piece”. There is no insurance in obamacare as there is no risk assessment mechanism. Rather, obamacare will be prepaid, subsidized medical claims partial provider payment.
    2) Outdated! You use the term exchange 19 times. If you did not get or read the memo, obama says these are to be referred to going forward as market places. You know like law #7 “All animals are equal.” has now been changed to… “All animals are equal, but some animals are more equal than others”.

    Looks like J.D. (noted, not as an insurance expert or anything else with respect to insurance) has taken on the role of Squealer for Napoleon. I would look out for “strange incidents” Mr. KLEINKE, when your usefulness is complete.

    • So, you’re gonna nit-pick over the use of a couple of terms? At least we can assess who Mr. Klienke is, and what his credibility is with respect to economics (of which “insurance” is a component).

      Unlike you. “Aurthur”

      • Let’s not bicker and argue about who killed who…or insurance and exchanges. People said I was daft to build my exchange in the swamp of DC, but I’m building it anyway.

    • “There is no insurance in obamacare as there is no risk assessment mechanism.”

      Bought time. Now we can focus on treating patients.

  8. Cheer up – it will fail. It has the same fictitious underwriting that the housing collapse did – based on incremental factorial derivative occurrences for transactions rather than actual underwriting criteria as a normal insurance market would. Forced fixed premium for five years, regulated 85/15 MLR’s, mandated ‘free’ services, decreased CMS reimbursement levels, the swelling trend of retiring baby boomers, the droves of newly minted ‘enrollees’ and the uncounted ‘ undocumented’ it is a cut from both sides: Increased consumption / decreased reimbursements.
    It falls on its own weight – give it five years – and it is dead; unfortunately – it takes the economy and the dollar with it when it fails (exactly as they have planned)

    • And, why have “they” planned this? Who are “they”? “They” have a plan for avoiding this collapse? Profiting from it?

      Are “they” the “1 percenters”? The “0.1 percenters”?

      How, precisely, will they safely prosper amid the catastrophe?

      • ” It has the same fictitious underwriting that the housing collapse did – based on incremental factorial derivative occurrences for transactions rather than actual underwriting criteria”

        BobbyG, I think it’s the same “they”. In fact the financial collapse “they” did profit from their own fraud thanks to friendly (and scared) politicians.

          • “prudently leveraged purchases of tangible hard assets such as housing and productive capital business equipment (rationally vetted and priced for the risk of loan default) are a far cry from the wholesale unsecured and increasingly unregulated leveraging of inscrutable (and ultimately intangible) iteratively aggregated-disaggregated-reaggregated debt instruments such as the built-for-flipping-and-fees securities that have now put our economy in the ditch.”
            Those – ‘they’ indeed.
            Great article: and no, we didn’t learn a damn thing – and since you are in the EMR/EHR field – I think you are at the epi-center for ripe the fodder for your next article.
            That market is pure pump and dump – when the leveraged backing for it disappears in 2015 : so do will the cue the next bust

  9. The worst possible thing that critics of PPACA could have done is have partisan opponents call for a delay of exchanges/expansion – as Gov. Jindal did on Meet the Press today. I have suggested that the Administration consider delay for different reasons – mainly that if the exchanges are rolled out next October and are not very functional I believe the general public will quickly turn negative – looking at the exchanges in the same way people look at DMVs in nearly every state. And if the public turns against the law that will set the cause of reform back – and not necessarily improve the odds of single payer. Would also suggest that it is impossible for the exchanges to function like an Amozon or Travelocity – and the proponents should not be comparing the exchanges to those sites. In general I support the President and believe that many elements of PPACA make sense in and of themselves – but in this case, the sum of the whole is less than sum of its individual parts. The problem is that the proponents will be even more determined to go ahead with this complex undertaking due to the partisan citicism and dismiss the valid concerns about the potential disaster of hastily building a very complicated system with people who have no experience implementing anything remotely close to this. I fear this will be like the F-35 – it looks great on paper but will fall years behind schedule, suffer multiple failures, incur huge cost overruns even without considering the deliberate efforts of some to sabotage the implementation.

    • Patrick – if you fear that “it looks great on paper but will fall years behind schedule, suffer multiple failures, incur huge cost overruns” wouldn’t it be better for the public to turn against it ASAP so we can scrap it and get something that WILL work?

      Your “support” for the Pres, is just what TPTB were/are counting on to keep folks from looking at, and working for, the only thing that will have any chance of working – Medicare for All ….

  10. JD- disingenuous to say that all are being put on the same starting line — the law and its regulations are specifically designed to NOT have all on the same starting line… whether it is waivers or rules and costs that only the few big companies can comply with, or the rules that self-funded companies are exempt from…

    You can try to rewrite history– but proponents made claims that opponents said were factually untrue and a fantasy —

    on nearly every front — the opponents have been correct… I could go through the policies one by one… guaranteed issue for children, high risk pools, community health center outcomes, CLASS Act, numbers based on Medicare fee schedule cuts, endless waivers for supporters of the law, it is not a tax, then it is a tax, then it is a tax but not big enough, to the myth of EHR (this was stimulus bill, but close enough), to the inadequate subsidies through exchanges… I could go on…

    Opponents are against this– proponents should be forced to make it work under the conditions under which they supported and passed it.

    That is common sense– if proponents now believe large segments are unworkable or undoable– let them have the temerity to stand up and say “we were wrong”… but today’s political class is immune from shame– and the President’s use of doublethink does not have to extend to those who do not believe in his history re-writes.

    • Joe – methinks the proponents can be divided into roughly 2 categories – 1) the ones who worked out his mess to satisfy the demands of their funders – insurance, Big Pharma, et.al. – who knew damn well who the beneficiaries would be, who knew that for their funders to BE the beneficiaries, the public could not be, who knew, however that they had to put some lipstick on this pig to have something for their PR to stick to. 2) the Dem fans for whom their hero could do no wrong and who jumped into the fray in support assuming that, “of course”, it would work and be a good thing, blah,blah, and who armed themselves, to variously sophisticated degrees, with arguments, quotes, etc from the PR dept. … And there are, no doubt, various combinations, permutations of the above …

      The former will never admit that they knew it was a piece of crap from the beginning and, as the system falls apart as it unfolds, have their excuses already made up, with variations of a) it was the Reps fault b) it was the economy’s fault. The latter group will follow suit …

      For those who a) understand we need to fix our healthcare system and b) realize that Obamacare is terminally faulty, even though they may not know it was inherently so, there will be increasing clamor for a system that does work – a clamor that was rising before Obamacare was introduced but was damped down by “expectations” for this “plan” – methinks that was the reason for the delayed implementation – one could plausibly use the “You must have patience, wait and see” approach. Medicare was implemented within 11 months of its enactment, so i understand …

      This plan was never designed to work as sold – its sole purpose, as far as i can see, was to head single payer off at the pass, as a bailout for the insurance companies who saw the writing on the wall ..

  11. J. D., I completely agree with your thoughts regarding health care reform, the government should just “make it work” and that “success is the best form of political revenge.” But I do hope the government doesn’t mind a little competition that may just blow the doors off their design model. Rooting for health care reform to succeed is a little like rooting for the Washington Generals to win. Yes, they look like a basketball team, they play like a basketball team, they do the X’s and O’s like a basketball team, but yet, somehow, they can never beat their more talented and innovative foe. I think the doubters are just looking for a more competent team. I’m not arguing the current highly regulated system is much better. But there are health companies and design models that are being developed today that could revolutionize the way we think about health and make health care reform look like some sort of misguided junior high science project or Soviet economic program. Then again, I could be wrong. But if I was a betting man, I would bet on one of the thousands of ideas coming from individual entrepreneurs than the one big one called health care reform – if for no other reason than the government, or the taxpayers, will most likely run out of money before they are able to design a model that works.

    • I’d love to see you win that bet. Zac. I assume you’re talking about the retail medicine markets at both the high and low ends – for primary care, TakeCare and MinuteClinic over here, and concierge over there? That would be great. And true systems for the big stuff. All of those who actually work great on the delivery system levels and are compatible with the ACA – mostly because it’s really just health insurance market reform. A big enough hill for all of us to get over: restore the risk pool, outlaw pre-existing conditions, standardize coverage so that plans have to compete on price. Once everyone gets to the same starting line, then the real race begins. May the best providers (up and down the food chain) win!

      • ps- Joe- you are making an argument for stagnation –let everybody sell the same Volga, and try to make it with cheaper parts to make a profit…

        quality and innovation on services, combinations of care, delivery styles, all matter — and having any one group make an arbitrary and politcally driven decision to determine what the ‘it’ (coverage) is, will fail… just as it has failed in every other aspect of the economy throughout history…

  12. The bureaucracy is massive, beginning with having thousands of health care professionals and business having to reapply on a 28 page application that was devoid of prior information, for the privilege of taking care of patients with Medicare.

  13. 99% of us are coerced into health care system participation when we are born. Chrisitian Scientists go EMTALA makes sure that the system can’t boot us out, even if it only staunches are bleeding long enough to stumble back into the street to live free or die one more day.

    • Oops…return key accident alert. How about “99% of us are coerced into health care system participation when we are born. Chrisitian Scientists go to jail when they’d rather prove your point by allowing their children to die of treatable illness. EMTALA makes sure that the system can’t boot us out, even if it only staunches OUT bleeding long enough to stumble back into the street to live free or die one more day. See my https://thehealthcareblog.com/blog/tag/jd-kleinke/ on here.

      • Off topic warning here. I have a grad degree in clinical psychology and would love to change careers and get involved in supporting healthcare innovations, like those suported by the ACA. Does anyone know about scholarships or other funding to support education in this field. With the system going through such a big transition, you would think there would be scholarships somewhwere. Any ideas?

    • We are coerced into the healthcare market only as far as we are coerced into being human. To call it “coercion” is to suggest that there is something about being human that goes beyond, well, being human.

      Aren’t we “coerced” into the food market and housing market and clothing market when we’re born, too? Does that mean that food, housing, and clothing should be designed and controlled by governmental force? Free enterprise has done a pretty good job of supplying food, housing, and clothing without any intervention by coercive government.

      We aren’t coerced into a healthcare market. We are blessed if we are born into a society that allows one.

  14. Grumble all you want about red states rooting for the failure of the ACA and I won’t quibble with you. But when you suggest that the law incorporates market principles you might check your definition of markets.

    Markets are where willing sellers and willing buyers meet without coercion. Without coercion, willing sellers and willing buyers agree on the quality of the good and the price or they agree to walk away from one another.

    The ACA’s health Insurance exchanges have none of those features. Health insurance exchanges are a state created medium where coerced buyers are forced to buy a product assembled via government edict from a cartel of sellers established by the government. You could be partially correct if you assert that the state mandated exchange have elements of fascism, state capitalistism, or crony capitalism. But call it market based and you are almost wholly incorrect.

      • By coercion, I refer to the threat of violence, loss of freedom(incarceration), or involuntary loss of property(extortion) under pain of violence or the loss of freedom. Coercion is unique to state mandated activivities and organized crime. Free markets are about willing buyers and willing sellers. Forcing people into a room and telling them they have to deal or face the coercion I describe until they deal is not a market and not even a market principle.

      • Fallacy of ergo debet esse: believing that “it is, therefore it should be.” Just because markets experience coercion doesn’t mean they should. The bulk of the free market argument is predicated on the belief that outcomes would be far superior for the buyer and seller if there wasn’t coercion. And history is the proof of that assertion.

        That doesn’t even consider the moral argument of whether coercion is ever acceptable (another bulwark of free market apologetics). Spoiler alert: it’s not.

        Jardinero1 is absolutely correct about the deceptively false “market principles” in an “exchange” that the government sets up and runs.

  15. The exchanges represent the Expedia, Hotels.com and Cars.com for health insurance — designed to shed the opacity of three other traditionally inefficiently priced industries — and increase choice, transparency, mobility and competition among insurers for consumers’ dollars.

    Ironic, isn’t it? The same voices arguing loudest for competition cry foul when the main rule is leveling the field. It’s hard to hide smugness under the circumstances.

    Too bad the architecture isn’t bigger. But that’s what you get when the insurance industry (or just about any other) crafts its own legislation. I guess a little sausage is better than none.

    Good article, Dr. Kleinke.

    • “and increase choice, transparency, mobility and competition among insurers for consumers’ dollars.”

      Don’t get too excited yet John. Corporate America will find a way around real consumer choice (and lower prices) – especially when the choice missing is – no to any of the above.

      • @Peter1 You’re correct. And I’m not all that excited, either. Those are Dr. Kleinke’s words, not mine. As I said, ACA is mostly a creature consisting of what remained after lobbies, Washington’s carrion birds, worked it over.

        Further down the thread Zac mentioned “a little competition that may just blow the doors off their design model” with the expectation the Exchanges would be a failure. Dr. Kleinke agreed and said he wanted Zac to win that bet and I agree. What would be better than an insurance plan that delivered the baseline minimal benefits AND MORE at the same or lower premiums.

        My understanding is that the Exchanges are the lowest common denominator, the thinnest of safety nets needed for what can be called “health care.” They are not mandatory but optional. No one is obliged to buy from the exchange if they have the means to afford better. I’m sure, for example, that MSAs, HSAs and their high-deductible adjuncts will not go away. I’m equally sure that any family that wants to keep dear old Aunt Maud on PVS will have all the freedom they can afford to keep her there as long as the PEG tubes don’t rot away. Those with means have never needed to be anxious.

        The real competition will not be to furnish the same or better benefits at the same or LOWER costs. But should that come to pass, hallelujah!

        Meantime, speaking of private sector alternatives, I hear about a fourth or third of Medicare beneficiaries have now opted for Medicare Advantage, which is a subsidized private insurance alternative to Original Medicare. I’m watching that little-discussed segment of the Medicare crowd to see how they compete with each other and with Original Medicare when the screws begin to tighten pinching off the tax dollars for those with worse outcomes and/or higher costs. I saw a formula once how that amount is calculated but it was too arcane for me to make sense of. But you can be sure that it ain’t gonna get any more generous as time passes.

        MA is only a few years old (my wife and I both were on it our first year of eligibility but have opted to go back with original Medicare) but already it is clear that the industry is figuring out how to quietly (unofficially, of course) harvest healthy beneficiaries for themselves while encouraging sicker ones to stick with the traditional supplemental plans — something like reverse adverse selection. But don’t mind me. I’m just an old guy jabbering. I don’t really know anything for sure.

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